Placing CR into perspective ...., page-6

Really, if there are currently 10 shares on issue and if you hold 1 share which is 10% and under a new rights issue they issue a further 10 shares and you take up your entitlement of 1 share you hold 2 shares out of 20 which is 10% if however you do not take up your 1 share you still hold 1 share but now out of 20 which is no longer 10% you have been diluted. So given that there are more shares on issue your percentage ownership can stay the same if take up your entitlement. If the company is worth say $10 now your share is worth $1 by virtue of holding 1 share. If they issue a further 10 there are now 20 shares on issue and you hold 2 shares which is still 10% or $1, if you don't take up your entitlement you hold 1 share out of 20 which we can see is no longer 10%.